Land Value Tax

Land Value Tax Definition

Land Value Taxation (LVT) is the policy of raising state revenues by charging each landholder a portion of the assessed site-only value of the unimproved land.

The tax is often said to be justified for economic reasons because if it is implemented properly, it should not distort market mechanisms or otherwise damage the economy the way most taxes do. It is also said to be justified for reasons of fairness by asserting that the tax is equivalent to a fee for protection of land ownership, which is the primary activity of any state. It is a cheap (and therefore efficient) tax to administer because much less effort is required to track land ownership than to track income or sales transactions. Land Value Taxation was an important part of the platform of the British Liberal Party during the early part of the twentieth century and was advocated by Winston Churchill early in his career.